Perfect Labor Storm 2.0 is a blog that highlights workforce trends, demographic shifts, and human resources changes that will change the way employers do business.

May 2010

May 26, 2010

The recession led to a rather interesting differentiation between employees who change jobs voluntarily and those employees who are poached. It’s the poaching of employees that employers need to fear the most.

These workers are the high energy individuals, who helped their organizations during the recession, are very visible to peers due to their 'catchy' energy and successes and today are not being rewarded adequately. In fact, they are likely being counted on to take on more and more work due to the amount of work they do.

A recent study has called these at-risk employees the "neglected warriors." A recent article in the Automotive News offered an example what is happening: "GM poaches hot, high energy marketing whiz." The people at most risk of being poached away are these neglected warriors who may be in line to become "heroes" in their next new company.

Going from warrior to hero status takes just one thing - recognition. Heroes are recognized for their deeds. They are not necessarily the best employees, but they are the people who courageously entered into the battle for their organizations’ wealth during the recession. The neglected warriors harnessed their internal energy to drive many initiatives forward; however, with all these good deeds came very little recognition from their current employer.

Neglected warriors have a high sense of urgency, are compelled to move forward, have supported their companies through the rocky changes of the recession, and who today find themselves unrecognized and unappreciated for their efforts. These neglected warriors are not at high risk of voluntary turnover, but they are at risk of being poached away by the companies who know how to find them and who appreciate the type of talent they possess.

Most employers are tempted to focus most on the “disengaged” employee. According to Leadership Pulse, this might be a mistake. While these employees are at risk of voluntary turnover, they are often burned out. They are less likely to be poached because of their disengaged state.

The neglected warriors are the employees who will be poached because they have no good reason to stay with their current organization. They are visible to others because they have a high sense of urgency; they have been on the front lines fighting to keep the organization moving forward in tough times. Heroes on the other hand are the most important employees to keep. But they are less at risk of being successfully poached because they feel valued. These individuals have a high sense of ownership in their job and company, and they say they are fairly rewarded. Smart recruiters will not go after these people, and their friends and co-workers will not recommend them to their headhunter colleagues.

The highest risk that employers face when it comes to their heroes is that these individuals, based on something that happens in the firm, no longer feel valued and move to the neglected warrior state. At that point, they too are at risk to be poached away.

Today, organizations have a choice. Leaders can sit by and watch as neglected warriors get poached away. Or they can be proactive. They can identify the Heroes and Neglected Warriors and give them their well-deserved recognition. Or they can take a wait-and-see attitude and wage the old war for talent, simply trying to find enough people or adequate supply to survive.

While that may seem like good news — more to go around — it’s a big problem for economies dependent on working young people to take care of older generations and fund existing programs.

This is in sharp contrast to English scholar Thomas Malthus' prediction more than 200 years ago that the population was growing so fast that people would soon be starving en masse. Through the mid-20th century, he was partially right. The world’s population was growing exponentially. What Malthus and many others failed to anticipate was the decline of the births in developed countries.

The U.S. overall birthrate fell 2% from 2007 to 2008, when about 4.2 million babies were born. This dip pushed the fertility rate below 2.1 per woman, the replacement rate that is required to sustain a population. This rate has been in steep decline for white females for several decades. By comparison the fertility rate in 1965 was 5.0 and in 2002 it was 2.8.

The fall in fertility rates has been masked by the high birth rates of Hispanics (3.1) and, unfortunately, teens. As recently as 2008, the number of births to teens ages 15 to 19 was 41.5 per 1,000 teens..and that’s after a 2% drop compared to 2007.

The overall birth rate decline in developed countries shouldn’t come as any surprise. For example, when Mathus was a teenager in 1775, British women on average bore 6 children. By 1875, the birth rate had fallen to 3.35. Today, it is less than 2.

The story isn’t much different in Germany. In 1850, the birth rate was 5 children per woman. Today it’s a paltry 1.4. In Italy, the rate went from 5 children in 1850 to 1.3 today.

The same holds true for the women in Singapore, Lithuania, Austria, Canada, Poland, South Korea, and nearly 65 countries. In some countries, the rate has fallen to one child per woman per lifetime. Since every child is actually replacing two parents in the next generation, it’s easy to see how quickly a country’s population can plummet.

Japan is one of the most striking examples of what happens when a population stops growing. Its population is expected to fall by 21% in the next 40 years. By then, 40% of the population will be made of people older than 65.

Europe’s population will peak by 2020 (the European Union as a whole has a very low total fertility rate of 1.5!). The population will drop 16% through mid-century. Germany, Poland and Russia will be down by more than 20%. Germany’s over 65 population has already reached 20% and is expected to exceed one-third by 2050. In Italy, more than one-fifth of all Italians are living on a pension.

The problem isn’t isolated to developed countries. Developing countries like Mexico, Egypt and India also face an aging population. Mexico had a birth rate of almost seven children per woman just a few decades ago. It’s now 2.3. Egypt went from seven children to 2.7. India is down from six to 2.7 births per woman. Even China’s birth rate, thanks to their one-child policy, is a paltry 1.75.

What do you think this means for their economies, communities and society? What does this mean for Generation Y and future generations?